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Rare metals: Beware the scam call that could cost the earth

Laura Miller
Written By:
Laura Miller
Posted:
Updated:
21/01/2013

The decision to answer your phone could potentially cost you thousands, particularly if the caller is from a firm offering the latest in get-rich-quick investment products.

It used to be shares in unlisted companies that were the hallmark of these cold calling firms, working in so-called “boiler rooms”, but the latest scam is rare earth metals.

A Midlands firm, for instance, is phoning investors offering a so-called “green energy bundle”, the Independent on Sunday reports.

For £6,744, buyers receive a kilo of dysprosium, a kilo of yttrium, and two kilos each of lanthanum and neodymium. And they are told these metals will move up sharply in value. But few have any idea of what these strange-sounding substances are or, more importantly, how to value and sell them.

All are, however, on the science lab periodic table of elements. They are among the 17 “rare earth elements” or “rare earth metals”.

The Financial Services Authority says rare earth elements sales by unregulated UK firms is the latest scam.

It warns: “Firms promoting these investments have often previously been involved in other high risk unregulated products such as carbon credits, landbanking, wine and whisky and overseas land and crops. They use high pressure sales tactics, targeting vulnerable and novice consumers.”

Late last year a London meeting of creditors heard how many unsuspecting investors had already lost substantial sums in one such firm.

There are around 25 to 30 similar companies – none of which needs FSA regulation – operating in the UK.